Burnham Faces Economic Scrutiny in First PMQs Amid Rising Borrowing Costs

Andy Burnham stated that his government would be grounded in fiscal responsibility during his inaugural Prime Minister’s Questions, which were held amid rising UK borrowing costs.

Conservative Leader Kemi Badenoch urged Burnham to specify where spending cuts would occur and how he would address the nation’s growing debt, following the UK’s borrowing costs hitting an 18‑year high on Wednesday.

He attributed the market turbulence to the legacy of the previous Conservative government, which left behind exposure that contributed to the volatility.

Burnham succeeded Sir Keir Starmer in July, and this Wednesday marked the first occasion he faced Badenoch at Prime Minister’s Questions.

Burnham emphasized his administration’s commitment to fiscal responsibility, noting that ministers were already implementing measures to reduce debt.

He told MPs, ‘This government will be grounded in fiscal responsibility, adhere to fiscal rules, and simultaneously alleviate cost‑of‑living pressures on our constituents, which is the approach we will adopt.’

Government bond yields have risen, with the 10‑year bond yield reaching its highest point since 2008 and the 30‑year bond yield hitting its highest level since 1998.

Consequently, borrowing costs are higher for the government over the long term, potentially limiting its spending options as the 28 October Budget draws near.

Burnham’s first PMQs appearance followed a summer recess during which he toured the UK and announced a suite of high‑profile policies designed to address the cost of living.

On Wednesday, Badenoch noted that the prime minister had outlined numerous spending plans but provided no details on how they would be financed.

“The markets are concerned that we now have a spendthrift prime minister who promises to satisfy everyone but cannot explain where the money will come from,” she said.

“He must fund all his new promises and faces a choice between raising taxes, increasing borrowing, or implementing spending cuts.”

“Yesterday he said change begins with honesty, so will he be honest and tell us: is he preparing to raise taxes again, yes or no?”

Earlier, Burnham said he had already reduced taxes, including VAT on energy bills and a reduction in business rates for the hospitality sector.

‘I have indicated my first steps will be to cut taxes, but I will not write the budget myself, as any prime minister would,’ he said, adding that he and Chancellor John Healey have agreed on an earlier Budget date to curb speculation.

In the Commons, Badenoch also referenced remarks by economist and cross‑bench peer Lord Jim O’Neill, who had been considered for Burnham’s chief economic adviser role but declined to join his government.

Speaking to the BBC, Lord O’Neill praised the prime minister for “a great first five weeks,” which he said had boosted consumer and business confidence, and warned that the recent rise in government debt interest rates would compel Labour to address the “triple lock” on state pensions and excessive welfare spending.

Badenoch cited Lord O’Neill’s warning that the prime minister’s tone during his Tuesday Commons debut could have unsettled investors, although the peer noted the spike largely reflected US market turmoil related to the Iran conflict.

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